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One could argue that the system is currently set up to benefit executives (who often end up winning, regardless of whether the company loses) at the expense of

One could argue that the system is currently set up to benefit executives (who often end up winning, regardless of whether the company loses) at the expense of shareholders and/or the general public. One could argue that this is a problem that market forces can't fix, and therefore that a regulatory solution is called for. One might refer to this sort of regulation as "taking back" the unfair advantages the executives currently.enjoy. Suggesting that we all are free to become executives and take part in the problem may be true, but it doesn't fix the problem or eve address whether one exists.

unoti 13y ago
Shame on the shareholders, then, for letting that happen. In the case of Zynga, why did they buy stock? Was it because Zynga was an amazing company with brilliant technology, a solid executive team focusing on long term fundamentals and sustainable business practices? Or did most of them invest because the stock price was going up and the business had buzzwords like "social", and so they jumped in like sheep to try to ride the gravy train? There's truth in what you say about the system rewarding the lazy. But that's fundamentally because of the stupidity and laziness of the shareholders. There's still opportunity in this turbulent system though to pick winners, and be a shareholder that rewards competence and punishes incompetence.
- abraininavat 13y ago
  But that's fundamentally because of the stupidity and laziness of the shareholders Absolutely, I agree 100%. Our Democracy as a whole suffers from the same problem. That doesn't imply, however, that the problem can't or shouldn't be fixed by someone other than the shareholders. Our society may decide that it would be a better one with some checks and balances in place to keep shareholders from shooting themselves in the foot. Note that I'm not arguing, one way or the other, that there's a problem or that it should be fixed. I'm simply pointing out that You can start a company too! and even It's the shareholders' fault may be true statements but they don't address whether the problem should be fixed.
- ubernostrum 13y ago
  But that's fundamentally because of the stupidity and laziness of the shareholders. It's kinda cute that you believe that, and are prepared to go to any length to blame immoral behavior on anyone you can find other than the people engaging in the behavior. Also, beyond the initial purchase of the stock -- which may be well before any signs of trouble -- shareholders can easily be made to have zero power; even the power to replace directors through shareholder elections can be taken away: http://www.nytimes.com/2013/04/13/business/sham-shareholder-democracy.html?_r=0 http://www.nytimes.com/2013/04/13/business/sham-shareholder-... "My shares count more than yours", requiring an ousted director's approval of his own ousting, plurality voting which allows directors to remain even when they can't muster a majority... the list of tricks goes on and on. I am not normally the type to say this, but: in the case of corporate governance, the system is now actually rigged against shareholders. Much larger changes than just "don't buy stock in a company that will later go bad" are needed.
  - unoti 13y ago
    If you couldn't see Zynga was poison long ago, even when it was on its meteoric rise, then you seriously were not paying attention.
Ixiaus 13y ago
Now why should it be any different? There are a few companies experimenting with different hierarchies, hierarchy-less, and different role/position value assignments (tied somewhat with hierarchy), but in general I think pitch-forking the "1%" is just the "herd entitlement". If you're on the bottom and don't like it, then get on top; this day and age that is actually possible. In history prior, you had to be born into the right name or granted a monopoly by the empire or king in order be "financially independent" (or thieve). In the USA you just had to have a great idea and the persistence to get people to buy into your idea. NOW all you need is an internet connection, some free software, time, and some free fucking education to build financial independence.
- _delirium 13y ago
  Income mobility is actually lower in the USA than in Europe, fwiw, and most startups are founded by people from middle-class or better families. Part of the reason is that the free education is, especially in poorer areas, not great: high-school computer curricula are in a sad state. Another part of the reason is that people with a family safety net find it easier to start companies. A third is that family connections help, whether it's for "friends & family" rounds of funding, or for product introductions (see: Bill Gates).
  - Ixiaus 13y ago
    Oh I'm sure there are difficulties in our day and age, I don't mean to trivialize it - but the idea that "people being paid $20M a year while I write code and get paid $140K a year is unfair" strikes me as ridiculous. The resource available to people in the modern time is far richer and available than any other time in history. Sure there are a lot of hurdles, but if you want to be that executive being paid millions, you can do it - whether you're a programmer, a writer, whatever.
- namdnay 13y ago
  Following your reasoning, there is no reason to criticise any entitlments. "MEPs have huge salaries?" "Mayors are giving social housing to their families?" "Government Railway employees get gold-plated pensions?": "Stop complaining! Just become one of them!"
fennecfoxen 13y ago
Yeah, you're right: the problem of executives getting paid too much? Investor problem. The problem of stupid programmers getting paid too much? Investor problem. Can regulation solve it? I doubt it. When we get down to it, it's not like there isn't an abundance of regulation on companies going public and releasing projections anyway. But as a programmer, it's easy to avoid: Avoid buying into risky IPOs. Whee. Are you a good programmer contesting that the system as-is reduces your pay or your options for meaningful employment with fair pay? I doubt it. If anything it makes it harder for "good" places, which would like to employ you meaningfully at a fair value, to hire anyone-else, increasing your odds. Now, if you're a good place who wants to hire good programmers and these stupid places compete with you raising your costs, that's another matter, and it really must stink for you... but it still sounds pretty implausible to regulate this problem away. If investors are going to be stupid about throwing around their money at the wrong companies, I expect government bureaucrats to be exactly as stupid about trying to hammer down the wrong companies, and now you've just made the whole process of being a company more risky and capricious for everyone.
baddox 13y ago
One might also argue that a "regulatory solution" will inevitably make things even worse than the market forces it tries to correct.
- acjohnson55 13y ago
  Another might argue that markets quite often fail, rather than produce the efficiencies they should in the ideal world, let alone the socially optimal results.
  - baddox 13y ago
    That's what we're talking about when we say that market forces may lead to inefficiencies. Few people deny the existence of market failure, but too many people advocate for government regulation to fix market failure while denying that precisely the same phenomenon occurs with government. It's appropriately called http://en.wikipedia.org/wiki/Government_failure http://en.wikipedia.org/wiki/Government_failure.

unoti 13y ago

Shame on the shareholders, then, for letting that happen. In the case of Zynga, why did they buy stock? Was it because Zynga was an amazing company with brilliant technology, a solid executive team focusing on long term fundamentals and sustainable business practices? Or did most of them invest because the stock price was going up and the business had buzzwords like "social", and so they jumped in like sheep to try to ride the gravy train? There's truth in what you say about the system rewarding the lazy. But that's fundamentally because of the stupidity and laziness of the shareholders. There's still opportunity in this turbulent system though to pick winners, and be a shareholder that rewards competence and punishes incompetence.

abraininavat 13y ago
But that's fundamentally because of the stupidity and laziness of the shareholders Absolutely, I agree 100%. Our Democracy as a whole suffers from the same problem. That doesn't imply, however, that the problem can't or shouldn't be fixed by someone other than the shareholders. Our society may decide that it would be a better one with some checks and balances in place to keep shareholders from shooting themselves in the foot. Note that I'm not arguing, one way or the other, that there's a problem or that it should be fixed. I'm simply pointing out that You can start a company too! and even It's the shareholders' fault may be true statements but they don't address whether the problem should be fixed.
ubernostrum 13y ago
But that's fundamentally because of the stupidity and laziness of the shareholders. It's kinda cute that you believe that, and are prepared to go to any length to blame immoral behavior on anyone you can find other than the people engaging in the behavior. Also, beyond the initial purchase of the stock -- which may be well before any signs of trouble -- shareholders can easily be made to have zero power; even the power to replace directors through shareholder elections can be taken away: http://www.nytimes.com/2013/04/13/business/sham-shareholder-democracy.html?_r=0 http://www.nytimes.com/2013/04/13/business/sham-shareholder-... "My shares count more than yours", requiring an ousted director's approval of his own ousting, plurality voting which allows directors to remain even when they can't muster a majority... the list of tricks goes on and on. I am not normally the type to say this, but: in the case of corporate governance, the system is now actually rigged against shareholders. Much larger changes than just "don't buy stock in a company that will later go bad" are needed.
- unoti 13y ago
  If you couldn't see Zynga was poison long ago, even when it was on its meteoric rise, then you seriously were not paying attention.

Ixiaus 13y ago

Now why should it be any different? There are a few companies experimenting with different hierarchies, hierarchy-less, and different role/position value assignments (tied somewhat with hierarchy), but in general I think pitch-forking the "1%" is just the "herd entitlement". If you're on the bottom and don't like it, then get on top; this day and age that is actually possible. In history prior, you had to be born into the right name or granted a monopoly by the empire or king in order be "financially independent" (or thieve). In the USA you just had to have a great idea and the persistence to get people to buy into your idea. NOW all you need is an internet connection, some free software, time, and some free fucking education to build financial independence.

_delirium 13y ago
Income mobility is actually lower in the USA than in Europe, fwiw, and most startups are founded by people from middle-class or better families. Part of the reason is that the free education is, especially in poorer areas, not great: high-school computer curricula are in a sad state. Another part of the reason is that people with a family safety net find it easier to start companies. A third is that family connections help, whether it's for "friends & family" rounds of funding, or for product introductions (see: Bill Gates).
- Ixiaus 13y ago
  Oh I'm sure there are difficulties in our day and age, I don't mean to trivialize it - but the idea that "people being paid $20M a year while I write code and get paid $140K a year is unfair" strikes me as ridiculous. The resource available to people in the modern time is far richer and available than any other time in history. Sure there are a lot of hurdles, but if you want to be that executive being paid millions, you can do it - whether you're a programmer, a writer, whatever.
namdnay 13y ago
Following your reasoning, there is no reason to criticise any entitlments. "MEPs have huge salaries?" "Mayors are giving social housing to their families?" "Government Railway employees get gold-plated pensions?": "Stop complaining! Just become one of them!"

fennecfoxen 13y ago

Yeah, you're right: the problem of executives getting paid too much? Investor problem. The problem of stupid programmers getting paid too much? Investor problem. Can regulation solve it? I doubt it. When we get down to it, it's not like there isn't an abundance of regulation on companies going public and releasing projections anyway. But as a programmer, it's easy to avoid: Avoid buying into risky IPOs. Whee. Are you a good programmer contesting that the system as-is reduces your pay or your options for meaningful employment with fair pay? I doubt it. If anything it makes it harder for "good" places, which would like to employ you meaningfully at a fair value, to hire anyone-else, increasing your odds. Now, if you're a good place who wants to hire good programmers and these stupid places compete with you raising your costs, that's another matter, and it really must stink for you... but it still sounds pretty implausible to regulate this problem away. If investors are going to be stupid about throwing around their money at the wrong companies, I expect government bureaucrats to be exactly as stupid about trying to hammer down the wrong companies, and now you've just made the whole process of being a company more risky and capricious for everyone.

baddox 13y ago

One might also argue that a "regulatory solution" will inevitably make things even worse than the market forces it tries to correct.

acjohnson55 13y ago
Another might argue that markets quite often fail, rather than produce the efficiencies they should in the ideal world, let alone the socially optimal results.
- baddox 13y ago
  That's what we're talking about when we say that market forces may lead to inefficiencies. Few people deny the existence of market failure, but too many people advocate for government regulation to fix market failure while denying that precisely the same phenomenon occurs with government. It's appropriately called http://en.wikipedia.org/wiki/Government_failure http://en.wikipedia.org/wiki/Government_failure.